From Department of Finance; Department of Housing, Local Government and Heritage; Department of Further and Higher Education, Research, Innovation and Science
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The Minister for Finance, Paschal Donohoe TD; the Minister for Housing, Local Government and Heritage, Darragh O’Brien TD; and the Minister for Further and Higher Education, Research, Innovation and Science, Simon Harris TD have today (Thursday) announced that €75 million of financing has been successfully sourced from the Council of Europe Bank (COEB) for purpose-built Student Accommodation. This is an important plank in the supply expansion being targeted by Government as part of the Rebuilding Ireland initiative and of the National Student Accommodation Strategy.
Minister Donohoe said:
‘The Irish economy is in recovery mode and we expect these student accommodation units to become available in the near future. I would like to thank the Council of Europe Bank for its support and its confidence in the recovery which is well underway. Agreeing loans with partner banks like this underlines the attractiveness of Ireland as a higher education provider and demonstrates that the Exchequer need not fully fund every public project’.
To support this initiative, legislation was approved to allow the Housing Finance Agency, a publicly owned agency, to finance Universities for the construction of Purpose-Built Student Accommodation. At the core of the program is the construction of new student housing projects by the seven Universities. It will also help relieve pressures in the private rented sector, as the Government’s housing strategy, Rebuilding Ireland, identifies the important contribution that increased student accommodation provision can make to resolving the overall rental housing undersupply problem and thereby moderate the rental pressure, for students and non-students.
Commenting on the announcement, Minister O’Brien said:
‘I welcome this announcement which comes after Cabinet approved the introduction of a number of rental protections which will benefit students. Increasing the availability of accommodation for students is the most effective way to provide them real choice and options and it is something that the USI continues to highlight. This funding will not only ensure a high standard of student specific accommodation in areas where it is needed most but will also reduce the demand amongst students for accommodation in the private rental sector’.
The Minister for Further and Higher Education, Research, Innovation and Science, Simon Harris T.D. stated:
‘I am delighted that €75m of financing has been secured for our universities to help them increase their supply of student accommodation. Increasing the supply of student accommodation is the primary aim of my Department’s Student Accommodation Strategy, and securing this funding brings us one step closer to achieving our target of 21,000 additional student bed spaces by 2024. We will continue to work across Government to increase supply of accommodation for students and to address the affordability barrier’.
This funding should help create a more balanced local residential market, with more accommodation to meet the current needs of student renters. Also, each unit built will meet the highest environmental standards, in line with the commitments to finance climate action projects. By providing a solution to this key issue in under-pressure areas, The COEB and the Irish authorities are closing one of the missing links in the residential sector by facilitating access to accommodation for an increasing portion of the student population.
Additional Information – Demand for Purpose-Built Student Accommodation
The demand for Purpose-Built Student Accommodation (PBSA) is determined mainly by two factors, student enrolment, including that of non-domestic students, and the availability of alternative accommodation for students. The increase in the number of students participating in higher education in Ireland is creating unprecedented demand for suitable, affordable student accommodation. This demand, driven by organic factors, is amplified by the effect of Brexit. At the same time, students unable to access Purpose-Built Student Accommodation are a considerable additional demand factor for the rental sector in the urban centres, where the Higher Education Institutes are located. This is why the Government’s housing strategy, Rebuilding Ireland, an Action Plan For Housing and Homelessness, identifies the important contribution that increased student accommodation provision can make to resolving the overall rental housing undersupply problem and thereby moderate the rental pressure, for students and non-students. It is estimated that for every four students housed in PBSA, a house is made available in the general rental market.
The attractiveness of Ireland as a University destination is high compared to other European countries. Ireland has both the youngest and fastest growing population in Europe. It also has the highest tertiary attainment rate (OECD 2019) of European OECD states and this rate is continuing to rise. In 2018, nearly half of all 25-64-year-olds (47%) have attained a tertiary education. The tertiary attainment rate is even higher among women (51%, compared with 43% among men) and for the younger generation, reaching 60% among 25-34-year-old women and 52% among young men in the same age group. The ever-increasing educational threshold required to compete in today’s knowledge economy is boosting participation rates in third-level education, and projections of third level enrolment predict that the sector will continuing growing at a rapid rate until at least 2030. Brexit has the potential to exacerbate the current situation as Ireland is now the only English-speaking EU country and EU students will no longer be eligible for domestic university fees in the UK, with international fees in the UK being significant, while they will be eligible for domestic fees in Ireland.